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Google’s ADT partnership turns the smart home into a service

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Google has taken an investment stake in alarm company ADT as well as signed a deal to tie ADT’s installer network to the Google ecosystem of smart home products. The deal helps Google by bringing professional installers into the homes of consumers to resell and install Google’s products and also helps ADT by giving it a lower-cost security offering and an entre into a world of other smart home services.

The deal, announced Monday has Google taking a 6.6% stake in ADT, worth about $ 450 million. It also means 20,000 ADT installers will be trained on installing Nest products from the smoke alarms to the security systems. This last bit is relevant given that the idea of a do-it-for-me smart home could become a point of competitive differentiation between smart home systems going forward. ADT will start linking Google Home Mini, Nest Thermostat and Nest Wifi to its system this year and then will add others over time according to Reuters.

The new Nest Wifi router and Nest WiFi point, which doubles as a Google Assistant speaker. Image courtesy of Google.

The rationale behind this deal ties to this idea that true smart home isn’t one that turns on your lights on command, but one that looks out for you in terms of security, energy consumption, air quality, and preventing catastrophic damage.  We see companies such as Resideo and Comcast pushing this idea in their product and sales strategy. If Google gets on board with its “helpful home” branding, we could see a new era of services that appeal to the mass market as opposed to those of us who like to play.

ADT’s an excellent partner for this because its installers are employees as opposed to external dealers.

First, the use of professional installers is a great move to try to reduce the complexity associated with making your home smart. I used to spend hours installing devices, trying them to Amazon or Google or SmartThings, and then building routines. Maintaining them also takes patience, time, and a wee bit of expertise. Getting someone to put devices in the home and to set up some basic routines is an easy way to get consumers to buy into these products and to control their experience so it’s a positive one. This would give Google an advantage over Amazon’s Alexa (although you can hire someone to help) and SmartThings.

With ADT installers being employees of the company, Google and ADT don’t need to worry about cannibalizing a middle man network of dealers like the professional home automation companies do. The security company model has focused on selling customers gear that they then pay for over time as part of a monthly service contract. It will be worth looking at how Google structures sales of its Nest gear through this particular channel. The prices for Nest gear are fairly high, to begin with, so installers may not experience a loss on commissions if they focus on Nest over the original ADT hardware.

The Nest Guard security system. Image courtesy of Google.

Practicalities aside the subtext of this deal is really important because it represents another shift in what the smart home actually should be. Instead of following along on Amazon’s idea of a digital assistant to control the home and take your orders, it appears Google may be settling into the idea that a digital assistant is great, but a smart home is something you can forget about. Why? Because it’s nestled into the walls and only takes action when needed to ensure the occupant’s health and security.

This might actually be closer to Nest founder Tony Fadell’s original vision for the smart home of “unloved devices” that he discussed when launching the Nest thermostat and the Nest Protect smoke alarm.

In this type of smart home, the focus is on security (something consumers already do or are willing to pay for), health and wellness, energy conservation, and the prevention of damage such as from a fire or water leak. Resideo, Honeywell’s smart home spinout spends a lot of time focusing on this angle, and I think they may have something with it.

In a conversation with former CEO Mike Nefkins, he envisioned consumers paying a fee for Resideo to monitor and control these systems on their behalf, much like a consumer buys electricity and doesn’t really spend much time thinking about it working or how it gets used. Comcast and startups trying to help the insurance industry are also promoting this idea.

The Honeywell T10 thermostat is designed for pro installation. Image courtesy of Resideo.

In the insurance world, entrepreneurs are pushing policies that offer not only discounts associated with the installation of smart devices but also refunds on premiums. Eventually, the insurance industry might switch to a different model, where you pay for it to alert you when damage might happen.

Today, Google doesn’t have all of the devices needed to promote the full vision of leak protection or air quality, but it could get there easily. On the air quality front, it needs to tie the Nest thermostat to air quality sensors that can then take action.

I currently have sensors from Awair and Airthings sitting in my home, both startups that could integrate with Google or become an acquisition target. Those focus on a single room and don’t tie back to HVAC ducts or airflow, which I think might be crucial, but Awair at least is focused on ensuring that when its air quality sensors detect a problem, it can trigger an action to the appropriate devices.

On the leak front, Google can license hardware and integrate or buy a company that understands how water flows in the home and can see a leak whether it’s a slow drip in the walls from a washing machine hose or constant leak like a toilet that doesn’t seal properly. Companies such as Phyn or Flo (which has a tight deal with Moen) would be a good partner here. Resideo bought a startup called Buoy to handle the water leak detection and flow algorithms, so it’s possible Google might bring this in-house.

All in, this deal, while lacking the bang of Google’s $ 3.2 billion acquisition of Nest in 2014 might be another watershed moment in the smart home.

The post Google’s ADT partnership turns the smart home into a service appeared first on Stacey on IoT | Internet of Things news and analysis.

Stacey on IoT | Internet of Things news and analysis

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